InfoWorld's Peter Wayner provides an inside look at the frustration iPhone developers face from Apple when attempting to distribute their apps through the iPhone App Store. Determined to simply dump an HTML version of his book into UIWebView and offer two versions through the App Store, Wayner endures four months of inexplicable silences, mixed messages, and almost whimsical rejections from Apple -- the kind of frustration and uncertainty Wayner believes is fast transforming Apple's regulated marketplace into a hotbed of bottom-feeding mediocrity. 'Developers are afraid to risk serious development time on the platform as long as anonymous gatekeepers are able to delay projects by weeks and months with some seemingly random flick of a finger,' Wayner writes of his experience. 'It's one thing to delay a homebrew project like mine, but it's another thing to shut down a team of developers burning real cash. Apple should be worried when real programmers shrug off the rejections by saying, "It's just a hobby."'

There are roughly 50,000 apps in the store. There are a lot of high quality ones as well. While the process could be tweaked I am sure I think "undermining" is way too strong word.

When developers get refused when trying to upload patches to an app already on the store - I'd consider that undermining.

When developers get whole apps refused because the application streams adult songs, despite the same songs being available to buy on Apples music store - then I'd consider that undermining.

When developers get whole apps refused because it's an RSS feed to a site with swear words, despite that website being freely accessible by Apples own apps - then I'd consider that undermining.

I could go on as there's plenty of evidence online of Apples bi-polar approach to censorship and their downright lack of respect towards the people who really made the iPhone great (lets face it, it's one of Apples biggest marketing angles).

Apple are really going to have to pull their head of the sand (and quick) because they no longer have the "isn't it sexy" and "it just works well" markets cornered what with Palm Pre and Android joining the fight and Blackburry, Nokia and Samsung making huge strides to catch up.
Plus you can bank on MS not to hang about too long (and given their massive app cateloge, they already have a head-start in some respects).

I don't speak for the populous, but in and around my area blackberry's are more popular than iPhones. So much in fact I can think of at least three iPhone users who have dumped the iPhone for blackberry's.

That has nothing to do with the app store. However, one of those guys that dumped the iPhone was working on iPhone development. He gave up when all four of his apps where rejected.